3.75% 12-Month CD at GMAC Bank - Nationally Available

GMAC Bank continues to offer one of the best 12-month CD rates in the nation with a 3.75% APY. This 12-month yield had been 4% before December 26th. Typically, GMAC Bank changes rates on Fridays so this should last at least through next Thursday. It's hard to believe a 3.75% APY is that competitive, but rates have been falling fast since the historic Fed rate cut in December.

GMAC Bank's FAQ page does a pretty good job describing the CD details. Please refer to my GMAC CD review post for a summary of GMAC's CD features. Note, one important feature is that if you fund the CD by check, the rate does not lock until GMAC receives the check. A reader in my previous post commented that GMAC Bank delayed opening the CD for two weeks and would not honor the rate that was listed at the time of the application. I've had good luck opening GMAC Bank CDs using funds in my GMAC Bank money market account. The online application gave me trouble on the last one, but I was able to resolve the issue by phone.

Like the CD rates, GMAC Bank has recently lowered its money market and savings account rates. But they remain competitive: 3.25% APY for the Online Savings Account and 2.75% APY for the Money Market Savings Account as of 1/11/2009. GMAC Bank continues to be my favorite online bank due to its ACH bank-to-bank transfer features (see my latest OSA review).

GMAC Bank's parent has been in the news lately due to its financial problems, but they appear to be in better shape now that the Federal Reserve granted GMAC bank holding company status. Also, the Treasury has stated it will take a $5 billion stake in GMAC. The latest news on GMAC has to due with its Chairman who just resigned due to his ties to Madoff (see Bloomberg article).

If the help that the Feds are providing doesn't allow GMAC to recover and GMAC still goes bankrupt, what happens to GMAC Bank? Refer to my recent GMAC's troubles post for more on this issue.

I have had excellent service from GMAC. They will pull the funds for a CD from an account at another bank by ACH, and lock the rate at the time you make the arrangement [by phone]. You get interest starting the next day, even before the funds have arrived. They set up the ACH transfer on the phone, very quickly. This should work for any bank account, but I don't know whether it will work for a money market fund.